O`hare Concession`s Records Subpoenaed

April 14, 1985|By Douglas Frantz.

A Cook County grand jury has subpoenaed the records of the company that operates the newsstand concession at O`Hare International Airport as part of a wider investigation by the state`s attorney`s office into recent contracts awarded at the airport.

The last 15 months of business records were subpoenaed recently from Elson`s of Illinois, a subsidiary of a major Atlanta-based newsstand operator, Elson`s News and Gift Shops, said a source close to the investigation.

Elson`s recently won a five-year renewal of its multimillion-dollar contract as sole operator of newsstands at O`Hare. The renewal came after the company sold a 20 percent interest in its operation to David Franklin, a black Atlanta lawyer, for $100 to meet Chicago`s minority participation goals.

One aspect of the investigation is aimed at determining whether Elson`s was pressured to bring Franklin or another minority partner into the deal, the source said.

A second source within the state`s attorney`s office confirmed that the records were being sought as part of a larger investigation into allegations of favoritism and pressure in awarding contracts at the airport, which is in the midst of a $1.5 billion expansion.

``Elson`s is part of some contracts being investigated, part of a larger investigation into O`Hare,`` the second source said.

The sources declined to identify any of the other contracts being investigated by the grand jury.

The overall probe is being conducted by Thomas Dwyer, a veteran assistant state`s attorney. Dwyer refused to confirm or deny that an investigation is underway.

Attempts to reach Franklin and executives of Elson`s were unsuccessful.

Mayor Harold Washington`s administration has been accused of favoritism and cronyism in connection with several contracts at O`Hare in recent weeks by political foes and some allies, but the mayor has strongly defended most of the deals.

Even Washington, however, has been critical of the arrangement that enabled Franklin, who has no experience in the newsstand business, to get 20 percent of the Elson`s contract.

Franklin was once a law partner and campaign manager for Maynard Jackson, the former Atlanta mayor now affiliated with a Chicago law firm. Franklin also has represented several show-business personalities and was involved in a lengthy courtroom dispute with comedian Richard Pryor.

Elson`s of Illinois brought Franklin into the O`Hare deal last year when the city asked bidders to include a minority partner. Elson`s has operated the newsstands at O`Hare since 1978.

City documents showed that Franklin bought stock in Elson`s equal to 20 percent of the company for $100, contingent upon the city`s signing the new five-year contract last October.

Franklin`s share of the operation could be up to $1 million over the life of the contract, said a businessman familiar with concession operations.

In a telephone interview last month, Franklin said that he was brought in to fulfill the minority requirement. He also said that he had invested several months of ``sweat equity`` by helping negotiate the deal with city officials.